As temperatures continue to raise and the energy supply is threatened to diminish, immediate solutions which contribute to reduce the energy usage and costs are needed with urgency. As such, I decided to share some tips with you to do so. Hopefully they can help you reduce your energy bill and our countries’ dependency on Russian energy supply. Whether you’re a household or a company, hopefully my tips help you:
Do your energy intensive activities on the weekends when prices are lower. Cook on the weekend meals which can be kept on the fridge so you only need to warm them up throughout the week, using less energy and reduce your costs. Preferably, eat low fat meals as they reduce the body temperature and the need for low temperatures. Eat seasonal salads and fruit as much as possible.
Make natural air currents at home when temperatures are lower, typically early morning and late in the evening to increase freshness and reduce air con usage.
Close all windows and use blackouts to cut the light and prevent heating your place throughout the day when temperatures increase.
At night switch on as few lights as possible to reduce home light induced heat.
If your windows aren’t energy efficient, do change them to double glaze glasses and efficient frames.
Reduce the temperature of your shower.
Use light fabrics and light-coloured clothes.
Switch your bulbs to LED ones.
Fix the temperature to a regular level.
Roll the curtains down or install blackouts to reduce the building’s temperature.
Allow ventilation to prevent electrical equipment overheating.
Use natural light as much as possible.
Improve your office’s thermal insulation.
Instruct your employees to become energy efficient in the equipment usage and charging cycles.
If your country has large swimming pool capacity. Negotiate with your employees time off during the afternoons so they can work when is fresher and enjoy the swimming pools in the afternoon.
Invest in energy efficient equipment.
With care to your energy bill,
former energy strategic stocks manager and economist
We are a part of this planet history, being the existence of most of us a tiny fraction in its timeline. René Magritte, the surrealist Belgian painter, illustrated so quite well in its “Human condition” paintings, one of which pictured above.
This realistic vision is also myopic to the extent that most cannot see the collective impact of individual similar actions. Those squandering behaviours continue as more of the old or similar products are available at the distance of a shop or a click & collect. Ecstatic by the new items or services purchased consumers may perceive a life in heaven when in fact are continuing the curse on the Planet. René Magritte’s La Malédiction, (The Curse) from 1963 and pictured below, illustrates it quite well.
We do have a chance to switch the surreal curse into a real paradise! Switching from the unsustainable linear production and consumption model to the circular model is a way to achieve so.
Achieving sustainable circular economy models stimulates creativity and innovation in the quest of giving goods a longer life, increasing thus its usage not only in one product but also in subsequent manufacturing processes.
Reducing the national depletion rate gap which spans from January to December is thus a must. The later in the year the better. And the soon we can change those habits, the better. The big depletion rate comes mainly from the 1% who in their culture of wealth demonstrations drive the Planet to a continuous global warming. How about following Bill Gates in donating fortunes to well managed institutions to tackle global causes instead of continuously seeking to being featured in the Year’s wealthiest person. He is donating his to the Gates foundation. Well done Mr Bill Gates.
Human capital has increased globally yet there are nations that prevent it from being used, either fully or partially. This is a waste of resources that should be reduced too as in so doing and well oriented may lead to Natural Capital improvements.
René Magritte gives us a perspective of our existence. We have a chance to act with overlasting impact, too. Would be good that by 2030 the depletion trend we have seen in the last four decades as illustrated in the graphic below is reduced and by 2050 is reverted. Yes, we can! Obama said so and made history! Collectively, Humanity can achieve what is needed. It does request a mindset shift too.
Each year on April 2022 we celebrate our Planet Earth, which as a living system, changes according not only to the intrinsic but also to the extrinsic factors. Many climate scientists have shown through their research that global warming during Anthropocene has been a consequence of Human activity, accelerated by the industrial revolutions.
As awareness raised so did the pressures to move away from exhausting the limited resources our Planet has been offering us so they can be used and consumed for longer allowing future generations to also use and consume them. To do so without reducing socio-economic welfare requires updates on processes, technologies and mindsets. Investment is thus needed. Investing in our Planet, if correctly done, implies an investment in society and consequently an increase in welfare. The latter stemming from for example reduced health problems due to cleaner air resulting from improved production technologies which pollute less too.
Increasingly more investors are aware of this need and opt for responsible alternatives allocating their money in sustainable investments, enlarging the sustainable investment pie. They also show the mindset change investors need to undergo. Yet risks of continuous greenwashing in investment still exists as the OECD recently pointed out, asking for standardisation to make sustainable investments easier to track and compare. The United Nations estimated in 2018 a range of 5 to 7 USD trillion annually needed to meet the agreed SDGs by 2030. Between 2018 and 2020 sustainable assets under management rose 15% according to the World Economic Forum to about USD 35.3 trillion. Yet, this level is behind UN’s expectations by 17% on average, as shown in the graphic below created by me with UN data. The lockdowns imposed as the Pandemic emerged resulted in a slowdown of investment projects as risks of unprecedented recession emerged, and the resulting drop on the global output might explain to a great extent this deviation.
Also due to the Pandemic the issuance of sustainability bonds, green bonds and social bonds, financing instruments for socio-economic and environmental purposes, accelerated to unprecedented levels too. By the end of this year, sustainability bonds issuance is expected to exceed USD 1.5 trillion. Will the pace be maintained and the sun rise through forests expanding our life and our planet’s?
Back in 2019 I was fortunate to attend an International Women’s Day event held at a men’s club, which opened its doors to a women’s event for the first time. I was pleased to witness this change, as a woman who spent over 4 years in a team of 9 men and myself! The venue premises were indeed remarkable and so was the guest speakers’ panel. In the quest for inspiration and networking to make my way back to the Londoner professional circle, I listened to their stories, navigating with them through their journey as they spoke. I thought there could be a space for me once again, in spite of the recent geopolitics change. At the end of the day, we were a bunch of professional women who had been facing the hardship of being a woman breaking boundaries, independently of their socio-economic and professional background. With this bit of fresh air, I felt inspired to carry on my journey. Moved with this positive feeling and having landed in a new place new to us all, I tried to create a space where women with apparent similar interests could also find inspiration to their journey. Yet, geopolitics were thrown in my face.
It also came to my mind the sculpture I came across in the autumn of 2013 in Ottawa, Canada. It represents the inclusion of women as people in Canada’s constitution in 1929, paving the way to a more inclusive workforce and a more equal society. About a century later, progress has been slow along the equality journey. Indeed, some women make other women move forward yet, others make them retreat, especially those who firmly stand for their right of being equally treated in a sexist and classist world disguised as progressive. Multiple researches on this topic show that women typically work harder than men, not because women are less capable but due to the peers’ bias working women need to overcome. On top of that, women earn less. We need to break the bias!
As we celebrate this International Women’s Day, we celebrate the announcement made in January by the European Commission’s President, Ursula von der Leyen, that a minimum of 40% representation of both genders at a corporation’s Board becomes law in the EU. A very welcome step from a strong leader!
To the women and the men, who really practice equality and make the world progress and diminishing the gap. Those with high and low visibility, who take action, speak up and reduce discrimination starting in their direct circle of influence, sometimes risking of losing the “support” they had.
We cannot forget the recently expanded war in Ukraine, continues. The autocratic leadership that has triggered so at a country’s level, have been also seen in corporations for quite some time, paving the way to the populism of the far right and far left, as the subordinates either agree with the leader or are made let go, unjustifiably. Corporate weak leaders, who have dictators as role models and see no boundaries to the means used to get their end, the absolute control and disrespect over others. Hopefully this horrible war can open the world’s eyes and triggers action to also stop the corporate totalitarians who have been making the world a more unequal and less human place. As Gary Hamel says, overcontrolled professionals get suffocated becoming unable to create greater value. Getting people contributing to their growth and then suffocate their work is very far from sustainable! Villarejos, tomatinas, bullfights, fandangos don’t allow progress. If scientists who have been working to find Covid-19 vaccines had been suffocated, today the world would have been in a far worse place.
Cheers to the women and men who grow sustainably, letting also others grow sustainably! A vehicle can only go as far as its infrastructures allow it to move.
Being sustainable means that existing resources will be used in a way that current as well as future generations can access and use them to the same extent permitting similar or better living conditions. So, it’s not only for the future but also for the present! Hence, I’m sharing with you the 3 fundamental reasons why you’ll fall in love with sustainability as soon as you realise the good of it.
Thanks to technological and knowledge improvements the air has gotten cleaner. According to the World Health Organisation (WHO), 395 million people suffer from chronic respiratory diseases (CRD), over 10 million die annually and 4 million of them do so prematurely. Other sources identify over 500 million of CRD and a 39,5% increase on CRD between 1990 and 2017. The WHO has identified “tobacco smoke, indoor and outdoor air pollution, and air containing microbes, toxic particles, fumes or allergens” as the top sources of unhealthy air. It is known that GHG emissions have soared since the beginning of the Anthropocene as the world was making economic progress, which paved the way to further research and the current knowledge. It has been a trade-off society has incurred. Given that technological developments and policies have enabled an increased renewable energy generation in the energy mix, powering further progress, society has a duty to transit to a cleaner energy mix, doing so reliably and robustly. Aligning stakeholders to do so has been challenging but as more benefits from deploying such technologies are understood less resistance is faced. An illustration of such improvements is the air quality in Beijing, more in the spotlight in the last two weeks due to the 2022 Winter Olympic games. It has been reported that Beijing has improved its air quality implementing very tough measures such as a winter without heating to force replacement of old coal boilers for cleaner versions and halt of the production from polluting sources. In the graphic below, which I elaborate using Air Quality index data, it’s observable that Chinese air improved during 2008 Olympics but retreated 3 years later, to improve again. Recently, the FT published two pictures of the same location of Beijing in 2008 and 2022. The first showing thick levels of pollution and the second a clear sky. Cutting pollution implies fewer toxic particles in the air and an expected improved air quality, which reduces the number of people with chronic respiratory diseases and hence a healthier population, in what concerns CRD, hence a better life quality. Doesn’t that make you happier?
2. Getting wealthier
Sustainable goods and practices are characterised by being durable, which means they last longer than non-sustainable ones being manufactured for multiple uses. They also should be conceived for reparation and re-integration in the manufacturing cycle extending the product and its components life expectancy. This means that instead of spending for example, 30 euros for a sweatshirt every year, you spend for example 60 euros on a sweatshirt which can be used in great conditions for 7 years. In doing so, the materials you’re saving by reusing multiples times the same product are being saved for future generations, so they can also be accessed and used while simultaneously you’re financially saving.
Multiple studies such as the IPCC reports show that climate change will affect geographies with extreme weather events. Knowing the risks to be faced and how to mitigate them, may allow for future savings, which ultimately increase wealth.
It has been shown that being sustainable has benefits for the Planet, the People and the Organisations. Leading organisations such as Unilever have embraced in sustainable practices and improved their revenues as shown in the graphic below, I created based on macro trends data, along with its profits, share value and distributed dividend and yield. Paul Polman, its CEO between 2009 and 2019 has been the face of sustainable leadership pushing for a systemic transformation in businesses and in society.
3. Building better
As a responsible citizen or organization, you embrace in sustainable practices, which include consuming and producing responsibly. Doing so, allows the finite resources to be maintained for a longer period allowing future generations to use them and enjoy high living standards. Aren’t we grateful for the land which has been feeding the world? Or to get to beaches and mountains that have been kept accessible and clean throughout the years by our ancestors? Haven’t we benefited from Leonardo da Vinci, Thomas Edison, Marie Curie, and millions of inventors, studies, good practices that have been contributing to society’s increased welfare and life standards? So why are we preventing future generations from enjoying the good in our Planet and improve future life standards? Do you want to Build Better? Reach out to me, perhaps I can help you!
In a recent survey to CEOs representing 46% of the world’s geographies, CEOs showed optimism regarding economic recovery. Yet, they also showed concern over its robustness citing cybercrime and health risks as their top priorities for 2022.
In spite of the 2021 economic impacts of Climate Change across the world and increased pledges on Carbon Neutrality and Net-Zero, this global challenge isn’t on many CEOs’ corporate agenda. In 2021 heavy rains destroyed infrastructures in Germany, China and India, to name a few. Consequently, energy supply was severely disrupted, contributing to prices surge. Recently, more investment has been announced on new infrastructures to strengthen energy systems robustness and reliability. During COP26 more pledges were announced. By its last day, a total of 5,545 companies had pledged for Net-Zero in multiple initiatives as the UN’s Race to Zero initiative, the Global Coal to Clean Energy Transition statement, the GFANZ (Glasgow Financial Alliance for Net Zero). Yet, Climate Change isn’t on the top of their priorities.
This survey also found that companies with higher levels of trust from their customers tend to make bolder sustainability commitments, driving change and receiving higher levels of satisfaction. Those companies have lower gender gaps, too.
As more companies realised Climate Change is a joint effort whose risks will be better mitigated with more companies tackling the challenge materially, actions increased. Knowing a company is responsibly managing its assets and values so across its value chain, stakeholders’ level of trust in that management team increases. For example, boards get support from its shareholders. On the opposite side, as greenwashing cases were uncovered, customers who felt misled opted for sustainable solutions and employees left. Companies’ reputation dropped, too, as I could gather in a Corporate Governance research, I conducted in 2020. The increasingly number of pledges, the sustainable initiatives and commitments taken, show companies are becoming more aware of the need to operate sustainably. Doing so strategically, can help the company improve its balance sheet along with positioning among its stakeholders.
As of 30th of January 2022, some of the pledges signed at COP26 have expanded to:
34% of the 2,000 largest publicly traded companies
5,227 companies signed the UN race to zero
totalling 6,380 the number of companies with pledges. However, the lack of common standards, methodologies, reporting and tracking systems make the impact of those pledges difficult to assess decreasing the certainty on how many degrees global warming will be limited by 2050. This misalignment also hampers investors and lenders’ ability to compare and make decisions. How about increasing the usage of corporate power as a force for good on the Planet, People and Profits? Reach out, I am available to help your organisation on that.
Sustainable Development Goal 16 aims to promote a sustainable society by promoting just, peaceful and inclusive societies. We’re still living in a backdrop where “conflict, insecurity, weak institutions and limited access to justice remain a great threat to sustainable development”.
The UNHCR claimed to have registered in 2018 the highest number in the last 7 decades, about 70 million refugees. Unjust sentences have been made; Amal and George Clooney have launched their foundation to make justice more just, The Clooney foundation for justice. Health treatments have been unequal; the Gates foundation helps to improve access to medicines in less fortunate places and medical research to eradicate specific diseases in those places. Misconduct has been widespread, from schools’ playgrounds to workplaces. If these were SDG indicators the SDG 16 evolution would be different than what is shown on the graphic below, extracted from the Sustainable Development Report 2021. Society won’t evolve if leadership doesn’t change.
Many agree that business should be a force for good, myself included. Milton Friedman argues, in his zero-sum perspective on sustainability, what is good for one is evil for another. Some interpret sustainability likewise, the Milton Friedman’s followers, some of them unconsciously. Although Friedman supported ESG practice, it was only on a low sphere of influence. On his perspective it was laudable if a small owner did so with his/her resources but not so much for the corporate executive.
“The situation of the individual proprietor is somewhat different. If he acts to reduce the returns of his enterprise in order to exercise his “social responsibility,” he is spending his own money, not someone else’s. If he wishes to spend his money on such purposes, that is his right, and I cannot see that there is any objection to his doing so. In the process, he, too, may impose costs on employees and customers. However, because he is far less likely than a large corporation or union to have monopolistic power, any such side effects will tend to be minor.”
Milton Friedman, New York Times, 1970
Others follow Alex Edmans’ perspective of growing the pie, some also unconsciously. Notwithstanding, sceptical and opposers have been shrinking and a community of the civil society, businesses and governments supporting sustainable initiatives, business models and lifestyles has been growing as more evidence sheds light into the benefits of doing so.
Sceptical and opposers should use their capabilities to do good instead of harming. It will make them more sustainable. Sustainability is the ability to manage the scarce and non-renewable resources so they last throughout generations, ensuring future generations’ wellbeing is at least as good as the current ones. Waste has thus to be reduced to zero. In not doing so, and not having leadership that enables so, a sustainable future isn’t foreseen. Good governance is one of the three pillars on which sustainability relies. Environmental and Social being the other two. Sustainable leaders should decide with an holistic perspective, embracing the three pillars.
Being humble, a leadership characteristic often taught and less frequently used, should also be dust free. What’s the credibility of an organisation that claims one value but practices another? Back in October 2019 the FT called business schools to be more sustainable and practice what they preach, recommending to follow the UN principles for responsible management education, two of them being sustainable purpose and values. Yet, being a PRME signatory doesn’t guarantee its compliance. Empirical evidence has shown big deviations regarding the first three principles, by professionals in top leadership positions, former students of signatory institutions.
Lack of credibility leads to unstable environments with implications at macro and micro level. What stability does a person (legal or physical) face in a place where regulation and policies have been set but misused in your face, with abuse of power, supporting out of scope events in detriment of events that fall within the public committed regulation, whose compliance would ensure a safe environment? Why aren’t its regulators independent? Why is history repeating itself in a different dimension? Thinking at macro level examples it comes to my mind when the Spanish government was sued by renewable energy investors after the committed subsidies were withdrawn. The same happened with the Argentinian government when unilaterally ended payments to its creditors. At microlevel, the situation also occurs. Some people have been harassed because (i) public transport and cycling were used to commute over private car; (ii) when the obvious was spoken, proven scientifically and empirically; (iii) gender and nationality. Albeit a complaint was made, existing rules were manipulated and harassment continued. What is sustainable about this? Nothing, in a common-sense world! Unfortunately, when faced with this type of situations some minds argue that as they aren’t in the human rights business, they shouldn’t be compliant with human rights. They can only be spaced out.
When individuals or organisations are harassed due to the sustainable options they have chosen or unchangeable natural factors, development isn’t sustainable. Myopic vision only sees short distance and the force for good gets forgotten to preserve unsustainable values. It’s like the Evil Queen silencing the Snow White with poisoned food, in her jealousy, instead of using her force for good.
How can organisations preach and ask to be followed on sustainability when they don’t comply with it and aren’t the preached humble leaders?
A survey conducted by Vault Platform in the UK (56%) and USA (41%) with 2,000 office workers suggests that, in both geographies, about 75% have suffered or witnessed misconduct in their working life. Bullying in the workplace is the most common misconduct experienced by over 50%, followed by harassment by 50% in both geographies. This seems a playground practice transposed to the workplace. UN Women informs that boys and girls experience bullying in their teenage years. Whilst boys most likely experience physical bullying, girls experience its psychological version. This evidence suggests that early education is paramount in stopping later misconduct while great governance could ensure its reduction in the contemporary workplace.
School-related gender-based violence is a major obstacle to universal schooling and the right to education for girls. Globally, one in three students, aged 11–15, have been bullied by their peers at school at least once in the past month, with girls and boys equally likely to experience bullying. While boys are more likely to experience physical bullying than girls, girls are more likely to experience psychological bullying, and they report being made fun of because of how their face or body looks more frequently than boys.”
Misconduct is a significant bad practice, very far from sustainable and ethical. The lack of psychological safety makes their net so strong that victims are unable to gather the sufficient support, making them feeling even more powerless, deepening so when rules are applied unequally. For example, to people of the same gender but different backgrounds. Events are manipulated. One falling within the policy scope is dismissed but another falling outside that same policy is protected with the strong consequences for the second aggressor. Although some organisations have processes in place, its misuse causes more harm than good. Isn’t the house upside down?
The Trust Gap Report also shows that misconduct at workplace has negative socio-economic implications. Yet, as the research shows professionals still misbehave, possibly when feeling threatened by ethic potential competitors to eliminate them. Using so has been destroying value for the organisations they belong to. GRI and UN Global Compact standards have indicators that help in tackling this big problem in the workplace, workplace violence and harassment, for those entities that want to change.
Now that COP26 is about to close, we’ve many alliances have been announced throughout these two weeks. It’s great to hear these public commitments to decarbonise themselves, and to influence other in doing so. Although this is a good step to improve the Planet wellbeing, Sustainability goes beyond SDG 13, Climate Action. Leaders have to build strong institutions to be followed. Complying with SDG16, Peace, Justice and Strong Institutions is thus another step to sustainable leadership. Wouldn’t institutions be showing authentic leadership if they cleaned their house first, ensuring good governance is carried out? Real apologies for the unsustainable practices some of their members have carried out against some stakeholders, events they were aware of let the unsustainable course of action run, would increase their credibility. Ignoring or pretending do not solve problems properly. Is time for organisations to remove the speck of their eye. Then leadership will be credible. Money is indeed needed to change the world and make it a just and stronger one, not a corrupt one.
The interdependence amongst governments, independent regulators, businesses and society exists to ensure good practices are kept amongst themselves, albeit not always functions well. Fortunately, the world and the Planet have come a long way and greenwashing is increasingly unacceptable. But more actions are needed as the end of COP26 shows. It seems also that we are moving from Milton Friedman’s zero sum to Alex Edmans’ growing the pie perspective.
The Emissions Gap Report, published this week by UNEP, supports IPCC AR6 and the UNFCCC’s NDC Synthesis Report with regard to the urgency needed to mitigate and adapt to Climate Change.
The efforts some countries expect to make, recently communicated through the updated NDCs are welcome. The World has become #onestepgreener. Yet, much more is needed as map 1 created by EGR team illustrates. Its efforts combined with corporate pledges only reduce greenhouse gases emissions by 7.5% (EGR, 2021).
To limit Global warming to 1.5ºC, with a 66% probability, a reduction of 55% from pre-industrial levels needs to be met by 2100, so atmospheric carbon concentration is at the 430 ppm maximum level. Different scientific sources inform the current carbon budget is over 410 ppm. Its increase rate has changed between 2.6% and 1% annually, according to World Meteorological Organisation (WMO) data. If we keep releasing at these rates, the carbon budget will be reached soon. In 2024 and 2025 respectively, as my calculations show in the graphic below, using WMO data. Given the current NDCs and pledges, a 66% probability of limiting global warming to 1.5ºC, by 2100 seems a too optimistic scenario. The EGR informs that with current emissions rate trend, the Planet will have warmed 2.7 ºC by the end of the century.
Emissions trading schemes, a big topic to agree on during COP26, have been contributing to limit atmospheric emissions in some sectors. As companies operating in those sectors are penalised for the GHG emissions they directly generate above the set threshold, they had to decide on its optimisation. Choosing the right scenario implies a thorough process, where sustainability needs to be at the centre of the decision making. Let me remind you that sustainability is a broad concept based on three pillars; environment, social and governance. A concept not always properly used, as greenwashing cases have shown.
We all inhabit this Planet. We all profit for the care we take of it. Like the community who takes care of its common property, the more stakeholders look after it, following the set standards, the better the outcome. When it’s a voluntary work, there will be free riders who will not contribute but will benefit from others’ collaboration. When collaboration is mandatory, the collaboration’s output will reach a higher level. Very likely welfare gains will also be higher. If this behaviour is scaled to a global level, with each neighbour being each country, mandatory global emissions trading scheme could be the most beneficial for the sustainability of our Planet.
Given that not all the parties have updated their NDCs and only 60% of G20 countries have set Net-Zero targets, how can COP26 succeed in managing the global GHG emissions effectively? Isn’t the world risking for the own backyard mindset to prevail over the protected forest one? Would setting national emissions trading schemes delay the Net-Zero goal as countries spend their resources on deploying so instead of allocating to deploy a global scheme? Getting countries to update their NDCs in a Pandemic scenario has been limited by the short-term political perspective. The EGR mentions that only 2,6% of public budget spent during the Pandemic were on activities that potentially reduce GHG emissions. This shows sustainability’s environmental pillar hasn’t been a core investment criterion. The world wasn’t prepared for the black swan and diplomacy failed to influence properly and seize the opportunity to change for good and speed up decarbonisation.
I agree with the EGR – The heat is On. Acting globally instead of individually, leads to efficiencies on capital allocation. When managing emissions with a global system, most likely corporate admin costs would be reduced. Capital savings could then be used to further decarbonise organisations’ activities. It also shows we are #togetherforourplanet.
The UNFCCC has released its full NDC synthesis report last Friday, 17th of September 2021. Whilst in the previous report only 113 parties had updated or submitted its NDCs targets, which corresponded to 49% of Global GHG emissions, the latest report shows that until 31st of July 2021, all parties had submitted their NDCs. A great progress has been done, as the call on my article from 31st of July.
Implementing those targets requires a collaborative effort, not always well received in spite of the common good all benefit from. The complexity of the system, given the underlying multiple interests and values makes the implementation an odyssey. The seas, currents and waves, through which the Sustainable transformation has been navigating, will take the Planet, Society, Businesses and Governments to lasting Prosperity, as long as compliance is a good practice. The commitments that parties have taken are summarised below in the graphical representation I’ve created.
According to the full NDC synthesis report, most of the parties expect to transit to a decarbonised economy between 2025 and 2030. But as “most” ranges between 41% and 70%, achieving Carbon Neutrality by 2030 and Net-Zero by 2050 has a high variability. To keep in the 1.5ºC global warming trajectory, a 45% reduction on global GHG emissions from 2010 levels by 2030 is requested (AR6). As such, high variability in the commitments makes me forecast dark and heavy skies ahead.
This landscape is easily seen on the below progression chart, “Projected total emissions levels in 2030 compared with historical levels and the estimated 2025 level”, was extracted from the report. Although a progress has been made in 8 percentage points, from the NDCs presented in 2016, alignment with 1.5ºC global warming pathway demands a 52.5% cut on GHG emissions from the latest NDCs. Reaching 26.02 GtCO2eq, implies a sustainable transformation in the economy, only achieved with a common effort as #weareallinthistogether. Many factors will contribute to the full economic decarbonisation. Innovation, collaboration, capital allocation to sustainable investments, policies and regulatory frameworks that enable a just transition, along with a clear strategy and roadmap will be key.
The report does call for urgent bold actions, through different strategies: (1) overperforming current NDCs, (2) update the existent commitments or (3) a mix of overperforming with new extension of NDCs. It suggests material strategies to align with 1.5ºC pathway, namely the halt of coal related investments, a phased-out usage of fossil fuels passengers ICEV; newly constructed buildings net zero energy consumption by 2020 and expanding the forest area. The latter a measure some politicians aiming to win local governments elections are currently promoting in their campaign in Portugal.
As mentioned above in this article, the decarbonisation and consequent socio-economic sustainable transformation demands a significant allocation of capital. Changing finance policy to promote sustainable initiatives is thus imperative. Many central banks have started to take bolder actions to attain a sustainable transformation pushing through its monetary policy instruments. Commercial banks have been requested to conduct stress tests assessing their resilience to climate related risks, which increase as we approach the 1.5ºC trajectory sooner than expected, as IPCCC’s AR6 has recently shown. As it becomes inevitable, what are your thoughts on how to best contribute on the economic sustainable transformation? What actions have you been taking?
For many sustainability has been only a trend and #greenwashing an acceptable practice. Considering its negative effect on the sustainable transformation, could #greenwashing be penalised as negative externality? A proxy of the #opportunitycost and the #welfare loss it generates by not fully delivering the claimed sustainable value, would be a doable penalty to be paid by the #greenwashers. It would also constitute a revenue source to the national and supra-national public finances and be used for the NDCs’ implementation. Hence, the good players would be benefiting from a good behaviour while the free riders will face a lower incentive to cheat. With time, hopefully this extraordinary revenue will diminish.
Just before we turned the calendar page to 2021 and amidst historical lockdown’s New Year celebrations across the planet, I wrote a small article titled Renewable Energy in 2020. It suggested potential New Year sustainable resolutions and wishes. The latter reflecting a NY’s tradition in both Portugal and Spain.
As we’re now in July, less than half-way through the end of 2021, it’s time to do a balance on how have we done so far with each one of our New Year sustainable resolutions. In a mid-year performance review style! Have you done yours? There’s still time for correction and stop those extra unsustainable behaviours, so you can be right back on track!
The first of my 2021 wishes, clearly didn’t materialise. Across the world many countries have been re-entering lockdowns due to new outbreaks, driven by Sars-Covid2 mutations spreading faster and with higher lethal risk as the Delta variant. Although some countries have been speeding up vaccination, increasing the immunity of its population, it hasn’t been enough. As of July 29th, the UAE is the country with highest percentage of inoculation, 79.3% with at least 1 dose and 70.8% of fully vaccinated population, according to the FT. Worldwide, the FT shows that 4.1 bn of vaccines doses have been given. Israel was the fastest country to reach 100 doses per 100 residents, doing so by mid-March. Second to Israel was the UK, achieving so by mid-June. According to Reuters, the inoculation speed prize for countries with a population over 1 million is now held by Ecuador with 1446 doses per 100k people. By October 2021 the FT estimates 5 billion doses could be administered with a likelihood just over 70%.
My second wish, has a brighter outcome. Climate Action has improved in 2020.
In terms of business and governmental actions, what has been done?
Energy transition is occurring. Worldwide renewable installed capacity has increased by 2 percentage points in the total electricity generation installed capacity. In 2020 261 GW were added, reaching 36.6%, according to IRENA. South America is leading with 67.8%, Europe follows with 49.8% and Oceania with 46%. The latter is the continent with fastest growth, 4 p.p. from previous year. In terms of demand, IEA shows that renewable energy grew by 3% in 2020 reverting the overall contraction on electricity demand, that was induced by Covid-19 pandemic’s output restrictions.
The USA is committed again with the Paris Agreement, officially back in 2021.
NDCs have been partially delivered. 2020 was the deadline for the Paris Agreement signatories to submit or update its Climate-Action plans, 40% of the parties representing 30% of global GHG emissions have done so with the majority expecting to do so throughout 2021. The new commitments have increased coverage of the parties’ GHG emissions to 99.2%. Some have already started implementing their action plans, others set 2021 as the kick off year. The UNFCCC estimates that the current plans are insufficient to meet the Paris agreement goal of limiting global warming to 1.5ºC by 2030. GHG emissions are expected to reduce by 0.7% in 2030 in comparison to 2010, yet 45% reduction is needed. The remaining 60% needs to present and implement its Climate-Action plan urgently.
Corporate Sustainability reporting has increased, but not all show the joint commitments requested to limit global warming to 1.5 ºC – 2ºC by 2030. More companies have signed pledges to do so and made public commitments to decarbonise its activities. Zero taskforces have been set up, to push industries to take bolder actions to decarbonise its sector. It’s a good step, we all would be much better if more embrace so and more material commitments are made, too.
Climate risk is increasingly part of central banks stress testing. Sustainability compliance is becoming now a criterion to be financed across the whole finance value chain.
With COP26 expected to be held in Glasgow in November, what is being done? Some examples:
Alok Sharma, COP26 president has been pushing for bolder commitments across the globe.
The EU has approved its Climate Act and among other measures banned the Top 10 single-use plastic goods of Ocean leakage – cutlery, plates, cups and lids, straws, bottles and caps, food and beverage containers, lightweight plastic bags, cotton bud, tampons applicators, pads, balloons plus its sticks and fishing gear containing plastic. As of July 3rd, they no longer can be transacted. The expected impact of this ban is a 50% reduction on Ocean’s leakage, avoided annual emissions of 3.4 million CO2, and savings of Euros 6.5 billion of consumers’ annual budget. Hopefully the existent stock won’t end up in the Ocean.
Sectoral Engagement is being carried out by the UNFCCC. Lookout for yours, engage and influence others to do so, too.
Myself? I certainly became more sustainable in my practices. I have been supplied by 100% sustainable energy sources for the longest time in my life. I have reduced my food intake to healthier portions, adding my sand grain to mitigate soil exhaustion and LULCF. I also managed to influence some people to recycle and reuse, extending certain products’ life cycle and participating even further in the circular economy. I’ve recently calculated my carbon footprint, too. It’s 53% below the UK average.
The Northern Hemisphere summer holidays season has started. It’s a good time to do your balance and, if needed, reconduct your sustainable behaviour. Happy Sustainable holidays!